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Standing up to deliver the dare to do spirit? Expolanka Holdings CEO and Director Hanif Yusoof (right) chats with Director Farook Kassim during the media conference to announce the Rs. 2.4 billion IPO yesterday. Director Sattar Kassim is also present. The trio along with Chairman Osman Kassim and Director Shafik Kassim were the founders of the family controlled but homegrown multinational with a motto of "Business beyond borders” and a tag line "Business with a dare to do spirit." Pic by Daminda Harsha Perera
Sri Lanka’s latest family owned but few of the home-grown multinationals to list, Expolanka Holdings Ltd., yesterday revealed it was on an expansion mode to better tap post-war opportunities and regional business prospects to deliver high growth to all stakeholders.
To finance this aggressive yet well planned strategy the company has announced a Rs. 2.4 billion IPO subscriptions to which are now open though the official debut is 12 May.
Expolanka is offering a near 9% stake of the holding company of the Group amounting to 172 million shares at Rs. 14 each. With a preceding private placement concluded late last year, the minimum public float of 25% qualifies it to be listed on the CSE’s Main Board.
“With the end of the war these are exciting times for Expolanka. We see significant growth potential both in Sri Lanka and across the globe. We want the public to be part of this growth and better success by a truly Sri Lankan global company,” Group CEO and Director Hanif Yusoof told journalists yesterday.
“We expect the IPO to raise Rs.2.4 billion which we intend to primarily use to enhance our working capital (around Rs. 1 billion), expand our warehouse capacity (Rs. 500 million) and reduce our long-term debt (Rs. 908 million out of a total of Rs. 1.8 billion). In addition, we intend to expand our global and local footprint and concentrate on enhancing our core business,” he added.
The IPO marks a significant milestone for the company. Expolanka Holdings Limited is the Holding Company of the Expolanka Group, which commenced operations in 1978. The Company has diversified interests in transportation, international trading, manufacturing and strategic investments sectors. The Group, which has a global presence in over 11 countries and 38 cities, has 46 subsidiaries and joint venture companies. The Group’s consolidated turnover for the 9-month period ending 31 December 2010 was Rs. 25.82 billion.
“Expolanka has deeply rooted family togetherness but we decided to go public because we want a solid and dynamic new broadbased structure to achieve the next phase of higher growth,” Yusoof said.
He said that with peace, tourism has boomed as well as the overall economy. Expolanka’s future growth strategies will be to better harness these opportunities. Its destination management subsidiary has handled 7,500 inbound tourists within the first 18 months of its operations and greater marketing was underway in India, China, Balkan states and Scandinavia to increase tourist arrivals.
The Group will also expand in logistics and shipping in Hambantota, education and IT exports which are part of the Government’s thrust to make Sri Lanka hubs such as knowledge and maritime. Noting that agriculture has immense scope in Sri Lanka the Group is also further expanding value addition in agri and processed food business.
He said that Rs. 500 million will be invested in setting up a fashion logistics hub at Group owned land in Orugodawatte harnessing the apparel manufacturing excellence within the South Asian region. The Group has also acquired a controlling stake in Global Logistics Services Ltd., further expanding its dominance as the biggest in logistics business in Sri Lanka. Expolanka is the third largest logistics provider in Bangladesh and among the top five in India.
Over the years it has established an extensive network of offices across the Asian, Middle Eastern and Sub-Saharan regions. The Group’s multi-specialty expertise has allowed it to offer a unique advantage in combining air, sea and land-based services to clients across its network of regional offices. The Group’s lucrative Airline Division for instance, currently represents 13 airline companies in several South Asian and Middle Eastern countries.
Krishan Balendra President, Head of Corporate Finance and Strategy of JKH whose division John Keells Capital is the lead managers to the IPO said that Expolanka will be the only large cap and relatively liquid stock with an extensive exposure to the region. “In Expolanka there is a fast growing regional story,” he said adding that the Group as well as the stock has significant growth upside. CT Capital Private Ltd. is the joint managers to the issue.
In the rapidly developing international trading sector, Expolanka has been a leading exporter of fresh produce for a number of years and has grown in other areas such as tea trading and agro processing. It’s also an importer of essential commodities. In the manufacturing sector, the Group is one of the largest processors and manufacturers of Black Seed based products. It also owns Neptune Papers (Private) Limited, which has a 19% market-leading share in waste paper export for recycling in Sri Lanka. The Group’s strategic investment arm invests in new high growth areas, and currently holds investments in tertiary education and Business Process Outsourcing (BPO).
The Group also intends to expand its network of offices both locally, in the southern regions of the country, and internationally. Through its expansion, it intends to capitalise on the increased business potential from new infrastructure here in Sri Lanka, and reap greater benefits from closer relationships with established clients overseas. This Group also indicated plans to implement a number of new initiatives in its remaining business sectors with the common theme of expanding geographic reach, enhancing production capacity, and launching new product developments.
